The Owners – Strata Plan No 87231 v 3A Composites GmbH (No 3) [2020] FCA 748 has provided further clarity on the potential procedural issues which can arise in class actions concerning defective building works. The applicant in this representative proceeding (Owners) is seeking statutory compensation and damages under the applicable Commonwealth fair trading legislation (namely, the former Trade Practices Act 1974 (Cth) and the Competition and Consumer Act 2010 (Cth)) arising from the purported acquisition of Alucobond panels, a form of light-weight architectural cladding. Owners claim that the panels are not suitable for use in the residential, commercial and public buildings for which the panels were bought, by Owners and group members to the application, because they pose significant fire risks and are an inherently dangerous building product.
In the present proceeding (an interlocutory hearing), the first respondent (3A) contended that it was likely to bring potential contribution claims against various third parties; to name a few, developers, façade subcontractors, architects, consultants and engineers who at some point may have engaged in the process of affixing the Alucobond panels to the Owners' and group members' buildings.
This class action proceeding included claims by group members nationally; therefore, the Court was required to consider various limitation periods across the Australian States and Territories. Despite the fact that this proceeding constituted an interlocutory hearing, Justice Wigney observed that certain long stop limitation provisions relating to defective building work claims may apply to certain contribution claims seeking to include third parties in the present litigation. Therefore, his Honour cautioned 3A to act expeditiously to investigate and prosecute its potential contributory claims in the "relatively near future", to avoid some of those claims becoming statute barred before 3A would be able to bring them. However, at this stage of the litigation his Honour was hesitant to determine the exact scope or extent of the likelihood that 3A could forfeit some viable contribution claims as a result of a statutory time bar.
Also at issue before the Court was whether the Court could accept 3A's proposed class closure order, the implication of this being that a group member who did not register their claim would be unable to receive any of the potential settlement sum arrived at in the representative proceeding (despite still being bound by the terms of that litigation). The Court accepted that it had the power to accept such an order; however, in the circumstances and absent sufficient evidence from 3A that there was a risk of prejudice to their case, such an order was disproportionate and therefore not warranted.
